Avalara study finds 322% ROI & payback under six months
Wed, 9th Sep 2026 (Today)
Avalara has published a Forrester Consulting study that found a composite customer achieved a 322% return on investment over three years, with a payback period of less than six months.
Forrester based its findings on interviews with seven decision-makers from different industries who had direct experience using Avalara. It combined their responses into a single composite organisation with 2,000 employees and annual revenue of USD $300 million.
The analysis estimated total benefits for that composite organisation at USD $1.2 million over three years, against total costs of USD $274,000. It also calculated a net present value of USD $881,000.
The study focused on tax and compliance work that interviewees said had previously relied on manual processes and older systems. These included sales and use tax calculation, returns filing, 1099 and W-9 form handling, rate maintenance, and exemption management.
According to the findings, those processes often consumed significant staff time and contributed to errors in calculations and exemption handling. Interviewees also linked the earlier approach to compliance risks, including audit findings, penalties, and back taxes.
After adopting Avalara, the organisations interviewed automated tax calculation, filing, and exemption management through a centralised system connected to their ERP platforms. The shift improved accuracy and compliance while reducing manual effort and spending on outside service providers.
Where savings came from
The largest quantified saving in the three-year model was USD $317,000 from avoiding third-party services and extra full-time hires. Forrester said this enabled the composite organisation to manage growth in jurisdictions and compliance requirements without increasing headcount or consulting spend at the same pace.
A further USD $267,000 came from use tax savings after automating taxable purchase identification, use tax calculation, and accrual. The study said this reduced manual review work by as much as 45 hours a month.
Exemption certificate management accounted for USD $203,000 in labour savings. Forrester attributed this to a 95% reduction in certificates filed with errors through centralised capture and validation supported by AI.
The report also assigned USD $96,000 in savings to managing 1099 and W-9 preparation, validation, and submission within Avalara rather than relying on third-party filing providers. Avalara Managed Returns contributed another USD $93,000 in labour savings by eliminating 570 hours of work and reducing time spent on return filing by about 95%.
For VAT reporting, the study identified savings of USD $53,000 and said compliance efficiency improved by 90% across multiple jurisdictions. It also listed USD $52,000 in savings from better audit preparation and avoided penalties, with roughly 36 hours saved per audit.
Additional benefits included USD $38,000 linked to participation in the Streamlined Sales Tax programme and USD $35,000 in labour savings from tax research work. The latter reflected what the study described as a 90% efficiency improvement, saving about 18 hours each month.
Wider tax pressure
The findings come as tax and finance teams face rising regulatory demands across multiple jurisdictions. The study argued that spreadsheet-based workflows become harder to sustain as requirements expand and grow more complex.
That pressure has led many companies to review how they handle routine tax processes, especially when internal teams must manage calculations, filing, and document checks across several systems. In the interviews used for the report, decision-makers described a shift away from fragmented processes towards a single setup connected to existing finance software.
Avalara said the study also highlighted benefits not quantified in the financial model. These included greater operational resilience, easier scaling, and stronger confidence among executives responsible for compliance oversight.
Jayme Fishman, Chief Strategy and Product Officer at Avalara, commented on the results presented in the report. "We believe a 322% ROI and payback in under six months demonstrate that compliance automation is a substantial financial advantage," said Fishman.
"By combining trusted tax content with automation and AI directly in the systems businesses already use, we help customers improve accuracy, operate with greater confidence, and make tax and compliance more reliable as their businesses grow," Fishman said.